One month ago, Federal Reserve Chairman Ben Bernanke introduced the idea of winding down the Fed's massive stimulus programs. On that announcement, the markets tanked. Today, Bernanke said pretty much the same thing. But this time, the markets yawned.

As NPR's John Ydstie explains, the Fed chairman appears to have finally found the formula to ease Wall Street's concerns.

JOHN YDSTIE, BYLINE: Bernanke and his Fed colleagues have been struggling to convince Wall Street that it shouldn't worry about a wind down of the Fed's massive bond-buying stimulus program. The Fed has been adding $85 billion a month to the economy through purchases of Treasury bonds and mortgage-backed securities hoping to stimulate growth. Today, Bernanke told members of the House Financial Services Committee, once again, that the level of the stimulus and the pace of the wind down will depend on how the economy is doing later this year.

BEN BERNANKE: We're going to be responding to the data. And if the data are stronger than we expect, we'll move more quickly. If the data are less strong, if they don't meet the kinds of expectations we have about where the economy is going, then we would delay that process or even potentially increase purchases for a time.

YDSTIE: Right now, said Bernanke, the Fed continues to forecast an improvement in the economy and employment later this year, but he said that forecast needs to be confirmed by the actual data. Bernanke said that even if the Fed does begin to wind down its bond-buying stimulus, it will continue to provide support for the economy. It'll do that by keeping its benchmark short-term interest rate extremely low at least until the unemployment rate reaches 6.5 percent. Right now, it's at 7.6 percent.

YDSTIE: In other words, short-term interest rates will remain low, but mortgage rates are rising as the markets absorb the possibility of an end to the Fed's bond-buying program. That led Republican Bill Huizenga of Michigan to ask this question for a friend.

REPRESENTATIVE BILL HUIZENGA: Should he refinance right now? That - I think that's probably a question a lot of people have.

HUIZENGA: That might be part of the problem with Dodd-Frank. If you don't qualify, then nobody qualifies.

YDSTIE: While suggesting that it remains likely the Fed will begin winding down its bond-buying stimulus this fall, Bernanke also hinted at some things that could derail that plan. One is if inflation is too low. We mostly think of high inflation as damaging, but low inflation can harm economic growth too. The Fed's inflation target is 2 percent a year, but right now, it's running significantly below that. Bernanke suggested another factor that could keep the stimulus intact would be a bigger than expected economic slowdown from the federal governments across the board budget cuts: the sequester.

The Fed chairman reiterated that the sequester, along with some tax hikes, have slowed the economic recovery by about one and a half percent this year. That prompted this question from Congressman Ed Perlmutter, a Democrat from Colorado.

REPRESENTATIVE ED PERLMUTTER: What does one and a half percent of real GDP mean in terms of jobs and wealth? And I mean, one and a half percent is just a number. What is that?

BERNANKE: Well, it's very significant. With another one and a half percentage point of growth, we would see probably unemployment down another seventh- or eighth-tenths, something like that. So it makes a very big difference.

YDSTIE: Stocks overall moved slightly higher than the Fed chairman's remarks, while interest rates edged downward. For the Fed chairman, that was a good outcome. John Ydstie, NPR News, Washington. Transcript provided by NPR, Copyright NPR.